Last of 5 ex-Madoff aides to be sentenced gets 6-year prison term

JoAnn Crupi, a former portfolio manager under disgraced hedge fund manager Bernard Madoff, received a six-year prison sentence for her role in Madoff’s multi-billion dollar Ponzi scheme, according to Reuters.

Crupi is the last of five former Madoff aides to be sentenced in the past week. In March, the group was convicted on multiple counts of conspiracy and fraud in March for their roles falsifying documents and backdating stock trades as part of the massive Madoff fraud discovered in 2008.

Their conviction followed what was the first and only criminal trial brought to court in connection with the massive Ponzi scheme. Investors lost more than $17 billion in principal, although the victims fund has since recouped nearly $10.5 billion.

Others charged in the wake of the fraud including Bernie Madoff, the fraud’s mastermind, pleaded guilty or cooperated with the government. Madoff was arrested in 2008, and began serving a 150-year sentence after pleading guilty a year later.

Prosecutors had been seeking a sentence of at least 14 years for Crupi, who participated in the creation of false trading data that was shown to Madoff’s clients. A New York federal judge said on Monday that Crupi “was compliant with everything and questioned little” with regard to the Ponzi scheme, Reuters reported.

Former Madoff operations director Daniel Bonventre received a 10-year sentence last week from the same New York federal judge who handled the cases of Crupi and the rest of the ex-aides. The others sentenced last week were former Madoff assistant Annette Bongiorno, who also received a six-year term, while former computer programmers Jerome O’Hara and George Perez each received 2 1/2-year sentences.

Prosecutors sought sentences of more than 20 years each for both Bonventre and Bongiorno, as well as more than eight years each for O’Hara and Perez.

Madoff’s former accountant admits to aiding massive fraud

A former accountant for convicted Ponzi-schemer Bernard Madoff, along with several of his wealthiest clients, pleaded guilty Tuesday to contributing to the financier’s massive fraud.

Paul Konigsberg, 78, an accountant and lawyer, admitted in federal court in Manhattan that he knowingly assisted Madoff in backdating trades on their mutual clients’ annual account statements and filing false tax returns. Multiple news outlets have reported that Konigsberg told a federal judge on Tuesday that he knew that his actions were illegal, though he did not realize at the time the extent of Madoff’s epic Ponzi scheme and the suffering it would cause.

Konigsberg pleaded guilty to two counts of falsifying books and records and one count of conspiracy, according to the U.S. Attorney’s Office for the Southern District of New York. In addition to receiving payments from the clients Madoff sent his way, the accountant also received monthly payments of as much as $25,000 from Madoff’s hedge fund for more than a decade, the government says.

Konigsberg has agreed to cooperate with the government in its ongoing investigation of Madoff Securities and will forfeit $4.4 million in illegal profits to compensate victims of Madoff’s scheme. He also faces up to 30 years in prison and additional criminal fines.

Madoff pleaded guilty in connection with the fraud in 2009 and is currently serving a 150-year prison term. Madoff’s personal accountant, David Friehling also pleaded guilty to assisting Madoff five years ago before testifying against his former boss.

Madoff victim fund swamped with claims

FORTUNE — The government fund created to compensate victims of fraudster Bernard Madoff’s massive Ponzi scheme has been deluged with claims exceeding $40 billion.

Richard Breeden, the U.S. Department of Justice-appointed special master for the Madoff Victim Fund, announced Tuesday that more than 51,700 people submitted claims looking to recover investments they say were lost as a result of the fraud at Madoff’s firm. That number exceeds what the government had been expecting, with Breeden saying in a statement, “it appears that at least twice as many investors as previously thought lost money in the Madoff fraud, with losses running many billions larger than previously documented.”

As overseer of the victims fund, Breeden is now tasked with sorting through those claims in order to determine how to dole out the roughly $4.05 billion the government was able to recover through asset forfeitures by those involved in Madoff’s scheme. Breeden is expected to toss out a “substantial” amount of “ineligible, duplicate or overstated claims” before distributing the money.

The claimants come from 119 different countries overall, with 58% residing in the U.S. After the U.S., the greatest number of claimants can be found in Germany, Italy, and France, respectively. According to administrators of the fund, nearly 78% of claimants reported losses of less than $500,000, and almost 13% say they lost more than $1 million each. In total, the investors submitted more than 3 million pages of documentation in support of their claims.

“The MVF claims showed a strikingly larger group of victims — with much larger losses — than anyone previously knew to exist,” Breeden said, using the acronym for the victims fund. “Other than the Gobi desert and the polar icecaps, few places on earth seem to have escaped the scourge of this fraud. This fraud was of epic, and truly global, proportions.”

The timing of the victims fund distribution has yet to be determined and will occur after Breeden makes his recommendations to the Justice Department.

Breeden says most of the people filing claims said they have yet to receive any money at all to recoup their losses. The victims fund is allowing investors in so-called feeder funds — hedge funds and other investment vehicles that entrusted Madoff with their investors’ money — to recover funds. That has not been the case with a separate compensation fund created through the liquidation of Bernard L. Madoff Investment Securities. That $9.8 billion fund is being overseen by a bankruptcy court-appointed trustee, Baker & Hostetler attorney Irving Picard, who has thus far distributed roughly $5.2 billion to Madoff’s victims, but only if they were direct investors.